Which of the following would cause total assets to decrease and total expense to increase?
A) Recording the depreciation of equipment
B) Recording the consumption of supplies
C) Recording the expiration of prepaid rent
D) All of the above would have that effect.

Question

Quizplus · Accepted Answer

- Recording the depreciation of equipment would decrease total assets as it reflects the decrease in the value of the equipment over time. At the same time, it would increase total expense as it is an operating expense incurred in the normal course of business.
- Recording the consumption of supplies would not affect total assets as the supplies were already paid for and recorded as an asset. However, it would increase total expense as it is an operating expense incurred in the normal course of business.
- Recording the expiration of prepaid rent would decrease total assets as the company no longer has the prepaid rent as an asset. However, it would not affect total expense as it is a non-operating expense (an expense not related to the normal course of business activities). 
Therefore, all of the above options would cause total assets to decrease and total expense to increase, making option D the correct answer.

Which of the Following Would Cause Total Assets to Decrease